Monday, October 09, 2006

Lower gas prices won't last, say UC-Davis professors

Although consumers may be pleased with the price breaks they have recently received at the gas pumps, oil-consumption experts warn that the long-term effects of depletion may result in higher prices in the near future. Several explanations for the lower prices, down $0.077 per gallon since last week and $0.290 since October, 2005, have been given since costs dipped below $3 per gallon, one of which is political.

With the mid-term elections approaching, Democratic Party candidates and critics have speculated that the Republican administration is manipulating prices to offset criticism of the party's stringent energy platform.

However, according to David Osleger, a member of the University of California at Davis geology department and former geologist for the Gulf Oil Corporation, the price of oil-per-barrel is constantly fluctuating and cannot be accounted for by any particular factor.

"The thing about oil prices is that it is so utterly unpredictable," he said. "There is no real grand scheme of setting the price of gas at the pump. It is all a reaction to global events and the rapidity of changes regarding issues in the Middle East, the repairing of pipelines in Alaska, Venzuela's president and numerous other things."

Osleger added that he feels gas prices could not realistically be affected by political motivations.

"There are so many variables that go into prices at the pump that I cannot conceive a way that the Republican administration could manipulate price," he said.

John Theobald, chairperson of the University of California's Oil Forum and professor at UC Davis, said politics are often involved in petroleum-based energy issues.

"That may be a factor, but not an important one," he said. "I would concede that some political manipulation of price is possible, but the important point is that prices will be rising in the long run."

According to Theobald, the expectation of a long-term increase in gas prices does not equate to Americans paying less right now.

"We can expect a lot of fluctuation because markets don't go up or down in a straight line," he said. "But consumers should expect the price of oil products to increase significantly in the coming years regardless of short-term drops in price."

Regardless of oil prices, experts contend that the future of worldwide energy consumption will be in conservation and alternative fuels. Research efforts such as those at UC Davis hope to be at the forefront of such discoveries.

Theobald said that while oil is the most convenient fuel in terms of its form at room-temperature and usability, alternative energies are crucial to fulfilling future energy needs.

"It's important people understand the importance of finding alternatives to oil," he said. "We need several long-range alternatives, not just one or two viable options. It is also about conservation. We need to study a range of different subject areas."

Osleger said Americans that have expressed frustration with the price of gas may not realize that costs are comparatively low.

"The prices we pay are extraordinarily low relative to a comparable amount of any other fluid, like water or orange juice," Osleger said. "The reality is we still pay a very reasonable amount. If gas kept pace with inflation and the amount of oil left in the ground, then we would actually be paying a lot more."

Osleger added that the United States will reach the point of peak oil in the near future and will have to consider its options.

"We could save enormous amounts of energy if we could get higher miles-per-hour in our vehicles, better hybrid cars and electric cars to improve our travel," he said. "And as we look at ways to conserve, we can look toward alternative energy. The inevitable is switching over from hydrocarbons to alternative forms."

Keep up the good work on spreading the word. People may think us crazy for "buying into" peak oil, but hey the same people thought the world was flat, the sun revolved around the earth and that Tom Cruise was straight. I do a live internet talkCast on Saturday Evenings at 11:00pm EST at talkshoe.com. The topic varies, but I'm sure you would have some insight and I welcome you to call in. - John

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